(BGR) Apple is no longer Apple – but Tesla is

This is the state of the smartphone/tablet market: Investors were overjoyed when Apple delivered 4.6% revenue growth in the spring quarter. And the hottest product of the year in the mobile device industry is going to be iPhone 6 because it finally is an iPhone with a screen size larger than 4 inches.

The phone industry has turned into something so mortally boring people don’t even notice how all the excitement has leaked out…until you compare it to the car industry, which is now in the same exact spot where the phone sector was in 2007.

The original iPhone changed what a phone was. The role of the display morphed from vehicle of passive viewing to actual control mechanism, far more intuitive than a keypad could ever be. That sort of fundamental shift of how a product can be used can only happen once in a decade or two. Now Tesla is changing the car in an equally fundamental manner: this new vehicle is totally silent, free refueling stations enable you to drive from California to New York without paying a cent in fuel costs, etc. It’s not reasonable to expect that the smartphone can undergo a similar transformation of its essence so soon after 2007. Maybe the next quantum leap will happen in 2019 or 2025 or 2031. Until then, fiddling with thinness, display size and camera quality is what we have to deal with.

Back in 2007, it was Apple bursting into the scene with the revolutionary concept of a large touchscreen that proved devastating for industry giants Nokia and Motorola. Right now, Tesla is getting ready to gut GM and Ford with its car range that is about to expand radically. Just as with Apple, the narrow early distribution of a groundbreaking new product is giving the established players a deceptive period of grace. It will take a couple of years for the real impact to become clear.

But we clearly are now entering an interesting period as Tesla prepares to roll out an SUV called Model X in 2015 and a budget car Model 3 in 2017. Both change the scope of Tesla’s consumer reach, because though Model X is going to cost more than $70,000, it will offer far more value for the money than the current Model S.

An ecstatic new Morgan Stanley research note claims that “we’d be disappointed if the Model X did not sweep every major Car of the Year award on offer by the automotive media.” Tesla is not trying to whip up enthusiasm for Model X but is actively trying to discourage early excitement and funnel people into buying the currently available Model S.

But there is a palpable sense of frenzy building in the automotive press and financial media. The design of the Model X is unusually bold and exotic for an SUV — the gull wing doors in particular are a gutsy move.

The Model X is small potatoes compared to Model 3, though. This car is expected to retail at $30,000, less than half of the price of the current Model S. It will represent a direct attack on the smaller German quality cars of BMW, Audi and Mercedes Benz. If Model X production ramps up aggressively and starts making real inroads in the luxury SUV market, the Model 3 could form the second prong of a dangerous pincer movement aimed at the most lucrative parts of the car industry: high-end SUV models and compact luxury sedans.

As Tesla’s charging station network expands and buzz around the structural innovation of the new models builds, rival car vendors seem to be wading through molasses. From GM to BMW, the old behemoths are experimenting with electric cars, but their efforts seem curiously tentative and half-hearted, much like Nokia and Motorola seemed to move in slow motion back in 2008 through 2010 as the Apple surge was building.

This reshaping of the car industry has all of the drama and big personalities that defined the phone industry seven years ago. Who would have thought back then that all the excitement would migrate to car business so rapidly?

NY Psot : Banks’ new encrypted chat service could infuriate SEC

Banks’ new encrypted chat service could infuriate SEC

Banks’ new encrypted chat service could infuriate SEC
The chat and instant-messaging service Goldman Sachs and five other banks are close to adopting has CIA-like encryption powers that could make life difficult for regulators, The Post has learned.
The six Wall Street powerhouses are expected to invest a total of more than $40 million for a stake in Perzo, the extremely sophisticated messaging service, sources said.
The deal is expected to close in the next few days, two people briefed on the matter told The Post.
The deal is being touted as a way to help the banks save money by switching lower-level employees — who now use Bloomberg’s sophisticated $24,000-a-year terminals mostly for chat and basic functions — to a lower-cost rival terminal, like those from Thomson Reuters. But less known is that the chat service offered by the privacy-obsessed Perzo boasts that its messages cannot be instantly read by snooping investigators at the Securities and Exchange Commission — or the NSA for that matter.
“A user can mark a message confidential, and in this condition, this message can’t be read even if it is forwarded,” Perzo founder David Gurle told The Post.
That feature could infuriate regulators — who have used their quick access to non-encrypted chat and e-mail logs to buttress investigations into interest-rate rigging and high-frequency trading.
The SEC’s enforcement division, which only discovered the 11-year-old Bloomberg Chat service as an investigative tool as recently as five years ago, according to the former government official, benefited from it in a second way, too.
While probes may have spread across several banks, Bloomberg, which saved the non-encrypted chats and instant messages for at least five years, was a central depository, making it a sort of one-stop shopping spot for serving subpoenas.
“The more efficient way [to subpoena bank records] was to have Bloomberg provide it,” said the official, who declined to provide his name so he could talk more freely.
A Bloomberg spokesperson declined comment.
Perzo, on the other hand, doesn’t store chat information — and that will require prosecutors and regulators looking to get chat logs in the future to subpoena separately each bank involved in a probe for its distinct encryption key.
That exercise could take longer and, possibly, slow down investigations.
“I don’t know how this is not going to tick off the SEC,” the official said.
“We retain and monitor all of our communications channels,” Tiffany Galvin, a Goldman spokeswoman, told The Post. “We make our communications available to our regulators as required. A system that does not allow Goldman to comply with those regulations would not be viable for Goldman.”
The terms of the deal with Perzo, which haven’t been made public, could allow banks to alter Perzo’s technology so they’re in compliance with skeptical regulators, one person said.
For example, banks would have to allow compliance officers to regularly and anonymously monitor calls, e-mails and chats, one person said.
Each financial firm in the deal is going to pay about $6 million to the company, two people said.
The package is slated to be made available next year under the name Symphony, the blog FT Alphaville reported Thursday.
Galvin declined to comment on the Symphony program.

>>> Barron’s summary: cautious cover story on Zillow (Z); positive on TEX

Barron’s summary: cautious cover story on Zillow (Z); positive on TEX 

Cover story is negative on Z, noting its merger with TRLA isnt the sure winner bulls contend; The two companies havent monetized much of their Web traffic, and get just a sliver of real estate advertising dollars, and both have been offering deep ad discounts to real estate chains; Its far from clear the merged Zillow-Trulia will grow revenues enough to match their puffed-up market values. 

Features: Positive on TWX, COV, SHPG, TMUS, WAG: Shares of these five companies are down because of aborted plans for mergers or inversions, giving investors a good opportunity to find bargains; Positive on TEX: Maker of cranes and other large machines is benefitting from pickup in big construction jobs, improved efficiency, strong position in port business, and its cheap shares could see a 30% boost in next 12 months. 

Tech Trader: Tiernan Ray reports on the growing popularity of the so-called yieldco, a spinoff of renewable-energy companies, principally solar-power outfits, that is supposed to offer a solid dividend supported by stable cash flows and a high payout ratio, a good example being SUNEs spinoff of TERP; FSLR may also make a similar move. 

Trader: There is ongoing debate about whether the correction that many expect is on the horizon; Cautious on PG: Company must show some relatively large brand dispositions in thie next six months if the stock is to advanve, says Michael McCormick of Bahl & Gaynor; Once political heat about inversions cools off, they are likely to pick up again, especially at companies whose foreign sales are a large portion of total revenue, such as ALXN, IPG, JCI, OI, and MON. 

Small Caps: Positive on STL: After merger with Providient New York Bancorp, firm is well-positioned to boost its customer base and cut costs, and shares could climb 20% or more. 

Special Report: 2014 MLP Roundtable features input from Becca Followil, U.S. Capital Advisors; Doug Rachlin, Neuberger Berman; Tim Fenn, Latham & Watkins; Michael Blum, Wells Fargo (positive on AHGP, ETE, EPD, EQM, MWE, RGP, TEP). 

Mutual Funds: Interview with Harold Levy and Eric Stone, Portfolio Managers, First Eagle Fund of America (top ten holdings: EMN, HPQ, STX, PBI, CAR, OXY, WYN, ROC, VRX, GRA); Interview with Nick Heymann, Multi-Industry Analyst, William Blair, who seeks companies that can capture growth principally in emerging markets (top picks: GE, DOV, ADT, Bombardier). 

Follow-Up: Cautious on GCI: Spinoff of news division from broadcasting core is already priced into the stock, investors should consider cashing out and buying a pure-play local broadcaster such as SBGI or NXST; Positive on INTC: Chipmaker seems to be coping with its problems better than rivals, leading shares to rise and creating potential for more upside. 

European Trader: Positive on DS Smith (SMDS.UK): U.K. based packaging company may look like a staid paper supplier, but underneath its a high-value consumer-products concern, and shares could command a positive re-rating as a transformation becomes more apparent and investors catch on." 

Asian Trader: New rules mean Hong Kong investors will soon be able to invest in 568 of the most liquid A-share stocks, while Chinese buyers will be able to trade 266 Hong Kong H shares, benefiting companies like Sands China that Chinese investors havent previously been able to buy. 

Emerging Markets: Emerging market sentiment is increasingly fragile, with Russia a key source of instability; A move by MSCI to drop state-owned Sberbank and VTB Bank from MSCI Russia could lead to big outflows. 

Commodities: Current bets on sugar are an indication the three-year stretch when it was cheap and plentiful in the global market is coming to an end. CEO Spotlight: Profile of URI chief Michael Kneeland says is overhaul of company is one of the great stories of post-industrial America. 

Streetwise: Cautious on VRX: Many of companys drugsincluding its second-largest product, the antidepressant Wellbutrin and its sixth-largest, Solodyn, an antibiotic used to treat acneface strong generic competition.

>>> Softbank has not given up on T-Mobile acquisition

Softbank has not given up on T-Mobile acquisition
Softbank Corp. [TYO: 9984] has not given up on acquiring T-Mobile US Inc. [NYSE: TMUS], after the company suspended talks with the US' third-largest operator of wireless telecommunication services, Japanese newspapers reported.

Softbank still believes that a triangular battle is better than the dominance by two biggest players to secure a healthy competition in the US telecommunication market, the Nihon Keizai Shimbun and Yomiuri Shimbun reported, citing President Masayoshi Son.

The company, Japan’s third-largest telecommunication service provider, and its US unit, Sprint [NYSE: S], ended talks with T-Mobile earlier this week on a plan to acquire the US company, Japanese newspapers had reported. In a press conference on 8 August announcing the first quarter earnings, Son declined to make an official comment on those reports about scrapping the acquisition plan, the Nihon Keizai report said today.

For other M&A opportunities outside the US, the company is always looking for a good opportunity, the president was cited in the newspaper report.


Source Nihon Keizai Shimbun, Yomiuri Shimbun

>>> Telecom Italia mandates three advisers for GVT deal – report

Telecom Italia mandates three advisers for GVT deal – report
Telecom Italia has hired three advisers to work on the merger between its controlled company Tim Brasil and Vivendi’s GVT.

The Italian-language daily La Repubblica reported this information, quoting unnamed sources, and added that the advisers are Citigroup, Banco Bradesco and Mediobanca.

Banco Bradesco will help finance the deal, Citigroup will help find international investors, while Mediobanca is to mediate in the relationship with Vivendi, the article noted.


Source La Repubblica

>>> Iliad remains keen on T-Mobile, continues to seek bidding allies

Iliad remains keen on T-Mobile, continues to seek bidding allies

Iliad, the French telco, remains intent on bidding for Deutsche Telekom’s T-Mobile US unit, according to the Journal du Dimanche. Iliad owner Xavier Niel has been in the United States for the past fortnight and according to sources close to the company, contact has been made with would-be partners.

The French language weekly said the group needs an ally willing to pony up EUR 6bn to make good on the offer for the Bellevue, Washington-entity. The additional funds would allow the buyers to secure up to 90% of the US player as DT wishes to drop its stake to 10% or less. Among the names mooted is that of Englewood Colorado-based satellite group Dish Network Corp, the JDD said without specific sourcing. It also referred to unidentified US media outlets' suggestions that Iliad is wooing investment funds.

In a separate feature on Niel himself and his ambitions, the JDD noted he is keen to sow oats in a diverse range of business areas. One area where he has no presence is online banking, that piece said. It quoted a onetime business rival who suggested the Free mobile telephone service would prove an excellent platform from which to move into internet banking.

It was revealed late last week that Sprint was pulling out of the bidding for T-Mobile. On Thursday 7 August, DT noted that Iliad’s USD 33 per share proposal does not add value for the company’s shareholders. The French proposal tallies up to about USD 15bn and today’s JDD suggested the German vendor is seeking a further EUR 2bn (USD 2.68bn).


Source Journal du Dimanche (France)

Israel 2014 Growth Forecast Cut to 2.5% on Gaza at Meitav Dash

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Israel 2014 Growth Forecast Cut to 2.5% on Gaza at Meitav Dash 2014-08-10 11:34:02.647 GMT

By Alisa Odenheimer Aug. 10 (Bloomberg) -- GDP forecast cut by 0.5 percentage point, economist Alex Zabezhinsky says in e-mailed report. * Govt 2014 deficit may be as high as 3.5% GDP vs 3% target * Meitav Dash reiterates 2015 GDP growth at 3%; 2015 deficit forecast at 3.5% vs 2.5% target * A prolonged “war of attrition” would cause deeper damage to growth, similar to impact of second Palestinian uprising

For Related News and Information: First Word scrolling panel: {FIRST<GO>} First Word newswire: {NH BFW<GO>}

To contact the reporter on this story: Alisa Odenheimer in Jerusalem at +972-2-640-1102 or aodenheimer@bloomberg.net

To contact the editor responsible for this story: Amy Teibel at +972-2-640-1107 or ateibel@bloomberg.net

(Barron's) Upside U.S. Economic Surprises Keep Coming

Upside U.S. Economic Surprises Keep Coming
Better-than-expected gains in supply managers' nonmanufacturing and manufacturing indexes raise hope, but expansion remains subpar.

While the stock market may continue to drift south, the economy keeps heading north, in steps that often exceed expectations.

Start with the back-to-back upside surprises for July released by the Institute for Supply Management. On Tuesday, the ISM reported a much-stronger-than-expected jump in its nonmanufacturing index, which tracks the huge service sector. That followed a similar increase in the ISM's manufacturing index, released the previous Friday, which also beat the consensus forecast.

These figures together yield a dynamic duo. The composite index of ISM manufacturing and nonmanufacturing, as calculated by Haver Analytics, leapt 2.6 points from its June reading, to a nine-year peak of 58.5. If the composite index can keep most of those gains over the coming months, this year's second half could duplicate the 4% annual growth in real gross domestic product seen in the second quarter.

On the labor front, new unemployment-insurance claims through the week ended on Aug. 2 ran at 289,000, lower than the consensus prediction. The four-week moving average on claims was 293,500, an 8½-year low, indicating that strong employment gains over the past six months are likely to persist.

Auto sales in July were somewhat lower than expected, partly because expectations have been strong. Sales of autos and light trucks ran at an annual rate of 16.5 million, down from an eight-year high of 16.9 million in June.

On a quarterly basis, the highest car sales in this expansion were in this year's April-June quarter, when annualized volume averaged 16.6 million. Only a small pickup from July's 16.5 million pace this month and next would boost auto sales in the third quarter above the second-quarter peak.

LAST MONTH, THE ECONOMY REACHED another milestone. The expansion that began in mid-2009 celebrated its fifth birthday.

On average, the 11 prior expansions since 1945 lasted a bit less than 60 months before giving way to recession. At a little more than 60 months, this one's duration is now running slightly above average. But favorable comparisons end there.

In the five years from second-quarter 2009 -- the trough of the 2008-09 recession -- to second-quarter 2014, real GDP grew by just 2.2% a year. That makes this expansion the slowest in the post-World War II period, far worse than the prior expansion, from fourth-quarter 2001 through fourth-quarter 2007, which ran 2.8% a year, also no great shakes. Both are far behind the previous, 10-year stretch, from first-quarter 1991 through first-quarter 2001, when growth ran 3.6% per year.

Why the slowdown? Much can be gleaned from the fact that the Index of Economic Freedom for the U.S., as measured by the Fraser Institute, rose every decade from 1970 through 2000, coinciding with an extended period of relatively strong growth. But the index has fallen since 2000, coinciding with relatively weak growth. The greatest decline has occurred from 2007 through 2011, the most recent year for which data are available.

The first half of 2014 boasted 4% annualized growth in the second quarter, but that followed a 2.1% contraction in the year's first three months. If growth does run at an annual rate of 4% through the second half of the year, the fourth-quarter-over-fourth-quarter gain will still be just 2.4%.

(Barron's) Opportunity in Busted Mergers

Opportunity in Busted Mergers
Aborted merger plans and fears about the future of tax inversions have created a bevy of bargains among affected companies' shares.

The collapse of two prominent takeovers and the Obama administration's threats to limit the ability of U.S. companies to relocate overseas stung Wall Street arbitrageurs last week.

Both developments also created buying opportunities in a range of stocks that had rallied on takeover interest or tax-friendly relocation plans, including Time Warner, Covidien, Shire, T-Mobile US, and Walgreen.

The situation amounted to a perfect storm for the arb community, with several events happening in close succession. 21st Century Fox (ticker: FOXA) surprised Wall Street last week by pulling its $85-a-share offer for Time Warner (TWX), sending shares of Time Warner down 12% to $73.23. While Sprint (S) never made a formal offer for T-Mobile (TMUS), a deal had been expected. So it was a mild shock when Sprint, the No. 3 U.S. wireless carrier, decided against pursuing T-Mobile, the industry's No. 4, due to the likelihood of strong antitrust opposition.

President Obama went after so-called tax inversions, in which U.S. companies buy foreign companies and reincorporate overseas to shave their tax bills. While the administration might be limited in what it can do without congressional legislation, the rhetoric seemed to have an impact as Walgreen (WAG) decided not to invert as part of its deal to purchase the remaining 55% of U.K. drugstore chain Alliance Boots that it doesn't already own. Companies that are contemplating inversion deals may balk out of fear that any new rules could be applied retroactively.

Covidien (COV) and Shire (SHPG) now trade at meaningful discounts to the value of announced takeover offers from Medtronic (MDT) and AbbVie (ABBV), respectively, amid concern that new inversion rules could be successfully applied retroactively—something most Wall Street observers think is unlikely. The wide spreads reflect the large size of these deals—Shire is valued at $46 billion and Covidien at $37 billion—and perceived risks.

Medical-products maker Covidien dropped $3 to $84 last week, and now trades at a discount of about $11 to the current value of Medtronic's cash-and-stock offer. If the deal closes early next year, investors stand to earn about a 13% return. As one arb told Barron's, the current Covidien price implies odds of about 50% that the deal collapses, a percentage that seems too high.

U.K.-based drug maker Shire also looks appealing. Its U.S.-listed shares fell $12 to $235 on the week, and trade at $29 below the value of AbbVie's cash and stock offer. In a client note Thursday, Credit Suisse analyst Vamil Divan wrote that his conversation with AbbVie offered "reassurance" on the deal, adding that "despite potential changes to the U.S. tax code that may make inversions less attractive, AbbVie's CFO (Bill Chase) reiterated their view that the Shire deal is compelling even beyond the benefits of an inversion."

AbbVie, he wrote, wants to close the deal by year end.

THE INVERSION FEARS also chilled shares of AstraZeneca (AZN), which rebuffed a takeover attempt from Pfizer (PFE) in the spring. AstraZeneca shares were down $4 to $68 as investors figured Pfizer may not make another run at the U.K. drug maker. Pfizer shares also have come under pressure, falling 50 cents to $28.34 last week and ending just above a 52-week low. Pfizer, the subject of a bullish article this spring ("Assessing Pfizer's Future," April 28, 2014), looks attractive at 12 times estimated 2014 profit and yielding 3.7%—above the 3.2% yield on the 30-year Treasury. There could be little or no growth at Pfizer in the coming years, but the stock offers a bond-like yield that could approach 4% around year end, when Pfizer might lift its dividend.

The Time Warner story has shifted back to the company's fundamentals following the withdrawal of the Fox bid, and the outlook looks good. At $73, the shares trade for about 18 times estimated 2014 profit. Morgan Stanley analyst Benjamin Swinburne wrote last week that the "fundamental base case is still compelling." He sees impressive 17% annual growth in earnings per share from 2014 through 2018, driven by Turner and HBO, as well as share buybacks and potentially higher leverage. He carries an $85 price target.

T-Mobile slid $3 to $29.94 as the Sprint deal died, but analyst Craig Moffett of MoffettNathanson Research says Sprint isn't T-Mobile's only possible merger partner and that the company's innovative and disruptive strategy in the wireless market could continue to pay off. One possible buyer: Latin American wireless giant America Movil (AMX). Moffett carries a T-Mobile price target of $40.

Walgreen fell $9 to $60.70 after the company decided not to invert as part of the Alliance Boots deal. Walgreen also offered disappointing profit guidance for fiscal 2016, ending in August, reflecting reimbursement pressures and higher generic-drug pricing. The new guidance of $4.25 to $4.60 a share, which came in conjunction with the Alliance Boots news, compares with the prior consensus of about $5 a share for fiscal 2016. The shares now trade for about 13 times the high end of that 2016 guidance. Morgan Stanley analyst Ricky Goldwasser remains bullish, although she cut her price target to $77 from $85.

(The Economist) Telecom Takeover : Shake it all about

NEWCOMERS are battering at the gates of America’s telecoms market hoping T-Mobile US, the fourth-largest mobile- phone operator, will let them in. Iliad, the French firm that made public on July 31st its bid for control of T-Mobile, is now sitting a little prettier. Though T-Mobile had turned up its nose at Iliad’s proposed price, a rumoured richer offer by Sprint, America’s third-largest carrier and 80% owned by Softbank of Japan, was then withdrawn, on competition worries. Following a moment for reflection, in which T-Mobile ponders the waste of almost a year in takeover talks with Sprint, a new phase of negotiations with Iliad and perhaps other bidders will no doubt begin. Dish Network Corp, whose chairman has expressed an interest before in hooking up his satellite television network with a wireless operator, could well be among other suitors.

America attracts disruptive outsiders like Iliad’s founder and main shareholder Xavier Niel (pictured, left) and Softbank’s founder and chief executive Masayoshi Son—both upstart innovators who have transformed their industries at home—because they are familiar with the scenario, if not the scale. Fat margins on products too complicated to compare in mature markets dominated by former monopolies leave room for price-cutting and innovation, both have proven (see chart). Mobile charges in America are far higher than they are in France now, though Japan’s still have a way to go.

Iliad is the more radical of the two. In 2002 its subsidiary Free launched a simple, fast and cheap broadband service. Before long competitors were forced to advertise the same price, and France moved from one of the most expensive broadband markets in Europe to one of the cheapest. In 2012 Free brought in low-cost mobile telephony. The novelty went beyond price: Free allows free phone calls to over 100 countries and does not lock users into long-term contracts by throwing in subsidised handsets that take ages to amortise.


In two and a half years, Free has picked up 13% of the mobile market. Rudolf van der Berg, an economist at the OECD, says he can think of no other mobile startup in a mature European market that achieved even a 5% share in less than five years. Free’s business model, he says, is cheapish for consumers but it is cheap mainly for Iliad. Billing costs are minimal because the offers are simple. Advertising is mainly by word of mouth, fanned by the press. Reducing administrative time and costs leaves room for price-cutting and innovation.

Mr Son first made headlines during the dotcom boom. Then, in 2001, in a joint venture with Yahoo to beat the Japanese incumbent, NTT, he handed out free DSL modems and offered broadband at half-price. In 2006 he bought Vodafone Japan and gave customers more choice, letting them pay more for their phones and less on the monthly tariff, for example. Then Softbank introduced the iPhone in 2008 into a market dominated by local handsets. Its popularity now explains a fifth of Japan’s trade deficit.

Mr Son showed his risk-taking appetite when last year he paid $21.6 billion for Sprint, laden with debt and losing customers, to crack the American market. He then pushed hard to combine Sprint with T-Mobile, reinvigorated under a new chief executive and cutting prices agressively. It looks now as if Mr Son bit off more than he could chew.

Mr Niel and Mr Son have characteristics in common, says Robin Bienenstock, who follows the telecoms industry. They are both outsiders, which may have sharpened their enthusiasm for attacking established players. Mr Niel grew up in a working-class suburb of Paris, did not go to university—a rarity in the upper echelons of French business—and counts some seamy episodes in his early career. Mr Son is an ethnic Korean, educated in America. Both are successful entrepreneurs: Mr Niel is now France’s eighth-richest man and the older Mr Son is Japan’s richest, according to the Forbes rich list. Both are tech geeks.

Iliad’s $15 billion cash bid for bigger T-Mobile US is now the only one on the table. Could it work? The claim that the merger would produce 10 billion ($13.4 billion) in synergies raises eyebrows. But it is not from combining back-office systems or piling far-flung customers onto a common network that Iliad expects savings. Simply, Mr Niel thinks he knows how to run a mobile-phone company better than most, and that he has the track record to prove it.

Whether or not the bid comes off, Iliad will have lost little. Mr Niel has shown his French rivals that he has other options if they keep turning down chances to consolidate at home. Vivendi, a conglomerate, signalled its exit from the industry on August 5th when it said it had received a $9 billion offer from Telefónica of Spain for its Brazilian telecoms operation, GVT. But it is selling France’s second-biggest domestic operator, SFR, to a cable company.

As for Mr Niel himself, he has done his personal reputation no harm. No sooner had Iliad’s bid for T-Mobile US been revealed than Arnaud Montebourg, France’s economy minister and not always a fan, tweeted “Bravo to Xavier Niel... France wishes him luck!” From wide boy to national treasure in less than a decade.